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$18,000,000 Bridge Financing for 100,686 SF Fitness Anchored Retail Center; Northern CA

Term: 36 months
Amortization: Full Term IO
LTV: 55%
TILC Holdback: $4,210,300
Rate: SOFR + 220

Transaction Description:

George Smith Partners successfully advised on the placement of an $18,000,000 bridge loan to finance a fee simple retail center in an affluent Northern California suburb. GSP was able to procure a lender in a turbulent market that was willing to provide significant cash out on an excellently located retail property. The 100,000+ SF fitness anchored neighborhood center was 52% occupied at the time of closing and will reach 90% once the fitness tenant opens for business.

Although the property performed well during COVID, GSP had to strategically market the opportunity considering the recent loss of the previous anchor tenant that has been replaced by the fitness tenant. Due to the extremely strong sponsorship, the Sponsor received 100% of the floor funding as cash out (the property was free and clear of debt) with additional TI/LC holdbacks for the fitness tenant. As retail experiences a strong recovery, this execution serves as a prime example for retail investors to enter a shorter-term loan during a rising rate environment and avoid committing to decade-high rates.

Related Financings

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    Transaction Description:

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    Transaction Description:

    George Smith Partners secured a $11,200,000 non-recourse bridge refinance with cash-out for a two-story retail plaza in the heart of Koreatown in Los Angeles, CA. Located next to a Metro D (Purple) Line subway station along a very busy stretch of Wilshire Boulevard, the Property is anchored by 7-Eleven and Carl’s Jr. and features a fast-casual food hall on the second floor. However, the food hall has been closed due to COVID.

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    George Smith Partners arranged $13,500,000 in quick-close, cash out, bridge-to-bridge financing for a multi-tenant retail center in Echo Park, California. The Sponsor approached GSP with intentions of taking out their existing lender due to an issue with lease approval for a cannabis tenant. In order to purchase an out-parcel on the Property, the cannabis user needed a lease in place so it could obtain a license from the local jurisdiction. If approvals were not granted, the Sponsor would have the ability to break the lease. GSP identified a non-bank lender who was comfortable approving a lease on a space which may never be occupied. The Lender’s flexible prepayment structure allowed the Sponsor to execute their business plan as the cannabis tenant planned to acquire an out-parcel on the Property after receiving approvals from the City. The first trust deed was sized to 60% of value with no hold back requirement for interest reserve or capital expenditures. The non-recourse, interest only loan does not carry any prepayment penalties. The Sponsor plans to take out the loan within 12 months with long-term fixed rate debt.

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  • $13,155,000 Non-Recourse Cash-Out Refinancing of a Retail Shopping Center; Orange County, CA

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    Transaction Description:
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    Challenge:
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